Consider Two Identical European Call Options on Two Identical Stocks

question 18

Multiple Choice

Consider two identical European call options on two identical stocks A and B,except that the former stock pays dividends and the latter stock does not.Which of the following statements is most valid?

• A)Call A is greater in value than call B.
• B)The time value of call A is greater than that of call b.
• C)The time value of call B is greater than that of call A.
• D)The insurance value of call B is greater than that of call A.

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An organochlorine chemical used in medications and insecticides, often for treating lice and scabies, but concerns exist about its safety.